Nordstrom Inc reported net earnings of $145 million, or $0.65 per diluted share, for the first quarter ended April 30, 2011. This represented an increase of 24 percent compared with net earnings of $116 million, or $0.52 per diluted share, for the same quarter last year. This year's first quarter results include charges of approximately $0.04 per diluted share related to the acquisition of HauteLook, a transaction that was completed during the quarter.
First quarter same-store sales increased 6.5 percent compared with the same period in fiscal 2010.
First Quarter Summary
Nordstrom's first quarter performance was at the high end of the company's internal plans, reflecting continuing strength in same-store sales across multiple merchandise categories.
• Net sales in the first quarter were $2.23 billion, an increase of 12.0 percent compared with the same period in fiscal 2010. • Nordstrom net sales, which include results from the full-line and Direct businesses, increased $150 million, or 9.2 percent compared with the same period in fiscal 2010. Nordstrom same-store sales increased 7.8 percent compared with the same period in fiscal 2010. Top-performing merchandise categories included Designer, Jewelry and Men's Apparel. The South and Midwest regions were the top-performing geographic areas for full-line stores relative to the first quarter of 2010. The Direct channel continued to show strong sales growth, outpacing the overall Nordstrom increase. • Nordstrom Rack net sales increased $76 million, or 19.5 percent compared with the same period in fiscal 2010, with same-store sales up 1.2 percent. • Gross profit, as a percentage of net sales, increased approximately 30 basis points compared with last year's first quarter. The improvement was driven by the ability to leverage buying and occupancy expenses during the quarter. The company ended the quarter with sales per square foot up 7.3 percent and inventory per square foot up 3.7 percent compared with the first quarter of 2010. • Retail selling, general and administrative expenses increased $78 million compared with last year's first quarter. The increase is primarily due to higher sales volume, new stores and HauteLook operating expenses and purchase accounting charges. • The Credit segment continued to improve. Customer payment rates increased, resulting in improved delinquency and write-off trends, and a corresponding decrease in finance charge revenue. Annualized net write-offs were 7.0 percent of average credit card receivables during the quarter, down from 11.9 percent in the first quarter of 2010. Delinquencies as a percentage of credit card receivables at the end of the first quarter were 3.3 percent, down from 4.2 percent at the end of the first quarter of 2010. As a result, the reserve for bad debt was reduced by $10 million to $135 million. • Charges associated with the HauteLook acquisition, including transaction costs, stock-based compensation expense and amortization of intangible assets, reduced diluted earnings per share for the quarter by approximately $0.04.